Hard times ahead for motor insurance fraternity

Ah, who’d be a motor insurer these days?! Underwriters of motor vehicle risks are losing money ham over fist these days and it’s all the fault of people like claims cheats, unreliable friends in government and people with life changing injuries.

The way things are going, motor insurers might as well just stand on street corners tossing bundles of money into the slipstream of every vehicle passing by. Collectively, they lost a staggering £3.5bn last year. That’s equivalent to ten years’ EU membership fees, GROSS!

And it’s all because HMG saw fit, shortly after taking complete and final leave of its collective senses, to slash the so-called Rate of Ogden which determines how much less insurers are allowed to pay seriously injured people than the courts say they should have.

Obviously someone will have to pay, and that probably means young drivers who know nothing and are bound to prang someone or something in the near enough future to justify whacking up their premiums and thereby recouping some of the extra money the long-term injured are currently raking in.

The net result, according to consultants OY, is that insurance premiums could increase by around 10% this year, adding around £30 to the average policy (or £300 if you’re a young male with a hot hatch). OY’s Tony Sauce says it’s going to be grim but there could be ‘some respite’ for insurers if the government gets on with delivering the promised whiplash reforms and returns to its senses over Ogden.